Canada Lags in Global Financial Literacy Rankings Behind European Leaders
A new global financial literacy study has placed Canada in 22nd position out of 27 countries, highlighting a significant knowledge gap among Canadians. The survey, conducted by digital financial services company Remitly, assessed respondents' understanding of key financial concepts such as interest rates, compound interest, inflation, currency conversion, investing, and cryptocurrency. Canadian participants answered an average of 75.5% of questions correctly, trailing behind European leaders like the Czech Republic, the Netherlands, and Norway, which topped the rankings with 90.9%, 86.1%, and 84.3% respectively. The United States ranked slightly lower than Canada, coming in 25th with a 72% average.
The study revealed widespread dissatisfaction with school-based financial education, with 70.5% of global respondents stating that their schooling did not provide enough knowledge to manage money confidently. In Canada, this education gap presents a challenge for financial advisors, as clients often lack a basic understanding of essential financial concepts. The survey found that 93.6% of respondents believe financial education should be mandatory for school-age children, emphasizing the need for improved financial literacy programs.
Self-directed learning and AI tools are increasingly being used to fill the void left by formal education. Globally, 82.9% of respondents described themselves as largely self-taught in financial matters, and 51.7% have used AI tools like ChatGPT for financial questions in the past year. However, recent research has shown that AI chatbots often provide incorrect financial answers, raising concerns about the reliability of these tools. Martyn Saville, global consumer protection manager at Remitly, cautioned against relying on social media personalities for financial guidance, noting the potential conflicts of interest and lack of qualifications among 'finfluencers.'
When asked about the most absent topics in their financial education, global respondents highlighted savings and budgeting (75.1%), taxes (55.2%), investing (53.9%), debit and credit (48.4%), and mortgages (29.7%). Canada's ranking, while not the lowest, lags behind peer economies like Australia, the United Kingdom, and Japan. The data suggests that the financial literacy gap remains a critical issue for Canadian financial advisors, who play a key role in educating clients and communities.